European Equity Benchmarks Edge Lower as Miners, German Banks Contract
European equity benchmarks slumped on Thursday morning bringing seven days of gains on the pan-European Stoxx 600 Index to an end after several companies issued profit warnings and mining stocks and German banks edged lower.
The declines came despite record highs for US stock markets the previous day and came against a backdrop of strengthening international currencies after the US dollar weakened; the euro and Britain's pound were both trading 0.4% higher against the greenback in recent trade.
"Calls for a negative European open come in spite of another record stateside close and global equities attaining their best since May 2015, still buoyed by hopes of Trump reflation, tax cuts, bank deregulation and US monetary policy normalization while decent US data prints help out too," Mike van Dulken, head of research at Accendo Markets in London, said by e-mail. "After rallying on US rate hike hopes, a USD pullback from 1-month highs has delivered hindering FX strength elsewhere," he added.
In equities, miner Anglo American lost 3.1% and rival Antofagasta slipped 2.7% in London. British defense group Cobham fell 15.4% after it issued a profit warning and said it cannot yet forecast 2017 performance, according to news reports.
Air France - KLM gained 8.4% in Paris helping other airline stocks, such as Deutsche Lufthansa, which added 2.9%. EasyJet rose 0.4% in London. Drugmaker AstraZeneca fell 0.5% in London, while rivals Merck and Sanofi advanced by 1.3% in Frankfurt and 0.9% in Paris, respectively. German lenders Deutsche Bank and Commerzbank declined 0.5% and 1.3%, respectively, in Frankfurt.
The pan-European Stoxx 600 Index was 0.34% lower, London's FTSE 100 Index was down by 0.52%, Frankfurt's DAX was 0.22% lower and Paris' CAC-40 was down by 0.42% at the time of writing.
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